Barclays Says Shift to Shorter Nigerian Eurobonds – Here’s
Why It Matters
If you’re
holding long-dated Nigerian Eurobonds, Barclays has a word for you: shorten
your duration now.
The
global investment bank is advising its clients to rotate into shorter-maturity
Nigerian dollar bonds, citing attractive risk-reward trade-offs amid policy
uncertainty and macro shifts.
This
isn’t just a yield play it’s a risk-control strategy in a fragile fiscal
climate.
Let’s
break it down.
What’s Barclays Saying?
Barclays
strategists have flagged that:
- Long-dated Nigerian bonds
(2038 and beyond) have seen high volatility - Investors should now look at
2029 and 2031 bonds, which are offering solid returns with lower risk
duration
They
maintain a neutral stance overall on Nigeria’s Eurobonds, but favour shorter
notes given:
- Fiscal uncertainties
- Global rate sensitivity
- Local currency dynamics
Why Shorter Bonds Look Better Right Now
1. Duration Risk
Longer
bonds are more exposed to rate hikes and FX shocks any policy wobble hits them
harder.
2. Liquidity Advantage
Shorter
maturities are more liquid and easier to offload, especially during market
stress.
3. Naira Still in Play
Naira
volatility and FX backlogs add another layer of risk for offshore bondholders.
Financial Juggernut Insight
If you’re
a retail or institutional investor:
- Monitor credit spreads on
2029–2031 notes - Don’t chase high yield
without checking duration and default buffers - Use shorter bonds as bridge
plays while watching fiscal reforms unfold
